Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Pennants are the workhorses of the day trader. They perform an invaluable service by marking the
midway point in a move. However, if a pennant is not accompanied by a flagpole, then it's not a pennant. Also, performance depends on a strong price trend leading to the pennant.

Pennant Trading Tips

Compute the height from the start of the price swing
(point A in the measure rule figure to the right) to
the
end of the price swing (B) and then multiply it by the
above “percentage meeting price target.” Add it (upward breakouts) to
the bottom of the pennant (C) or subtract it (downward
breakouts) from the top of the pennant (C) to get the
target (D).

Half staff

The average move from the trend start to the top of the
pennant is 27% in 14 days. The move from the pennant low to the trend end is 25%
and takes 23 days. Thus, the pennant appears nearly midway in a price move. The
half staff figure to the right shows an example, with A equal to B.

Pennant tilt

Performance suffers when the pennant
slopes in the direction of the prevailing price trend. The Pennant Tilt figure to
the right shows an example of price tilting upward in a rising price trend.

Flat base

If the pennant appears above (upward breakouts) or below (downward breakouts) a flat base then expect the move to be a large one.

Tight pennants

A tight pennant performs better than a loose one. A loose
pennant is one in which price meanders, pokes outside the trendline boundary,
contains white space, or looks jagged. The Tight v. Loose figure to the right shows
an example.

Pennant Example

The above figure shows an example of a pennant chart pattern. The flagpole begins at point
A and completes at B. Following that, the pennant appears from
B to C, bounded by two converging trendlines then the decline
resumes and bottoms at D.